Credit Cards, An Alternative Financing Option for Small Businesses In Nigeria

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Credit cards are a great way to get money especially if you have a guaranteed way to pay it back. It’s unfortunate that many small businesses in Nigeria can not access the cash they need to make their businesses thrive. A credit card is an easy way to get instant credit without interest to run your business. Credit cards should be available to any individual who holds an account in Nigeria provided you can pay back the money in the stipulated time.

So basically for those who don’t know this already, a credit card in very simple terms, is a card you can use to get credit. It is similar to the card used at the ATM or POS machines although those debit cards have our actual balance in them while a a credit card comes with a limited amount of money you can borrow for a period of time without interest from your bank. When you have a credit card, it means you can borrow money from the bank or credit card company. They set a limit on how much you can spend, called a credit limit. Let's say they give you a credit limit of N500,000. That means you can use up to N500,000 without paying any extra fees for a certain period of time, usually around 30 to 50 days.

But here's the catch: if you don't pay off the money you spent within that time, the bank will start charging you extra money, called interest, on the amount you still owe. So it's important to pay back at least the minimum payment each month to avoid paying more than you borrowed. Remember, using a credit card means you're borrowing money that you'll need to pay back later. If what you need is 30k don’t go spending 700k just because you can.

Many small businesses in Nigeria fall prey to Microfinance banks because they do not have knowledge about what is accessible to them. Provided your business is registered with the CAC, you are eligible to apply for various credit cards in Nigeria.

A few banks that offer credit cards are

1. Standard Chartered bank
2. First Bank of Nigeria
3. United Bank for Africa
   And many others.

I should remind you that the money in a credit card is not your money. So what ever you do, make sure you can pay it back by the stipulated time. If you use the money to renovate your shop, and eventually can not pay back, you will begin to swim in debt till it becomes literally difficult to keep your head above the waters. My advice; invest in something you can get immediate returns from. Credit cards are particularly good for people who have daily sales.